Auto insurance should you get on a car that is paid off?
by Guest » Wed May 26, 2010 04:13 pm
What kind of auto insurance should you get on a car that is paid off?
Total Comments: 2
Posted: Wed May 26, 2010 04:15 pm Post Subject:
Great question. When your car is paid off, you no longer have a bank requiring you to carry coverage to pay if your vehicle is damaged in an auto accident. At this point, you would only be required to carry what the state law dictates. However, based on your statement, you want to make sure your automobile is replaced in the event of a claim. In that case, you would want to purchase more than what is required.
Do note though, most auto insurance policies cover only the factory equipment that was included on the vehicle originally, unless you specifically ask for custom equipment coverage. In addition, many policies will cap the amount that will be paid out for any sound reproducing equipment.
Posted: Wed May 26, 2010 04:16 pm Post Subject:
“Full coverage” is a very misleading term but unfortunately is often used when talking about auto insurance. No auto policy will cover everything. There will be limits as to what is paid.
Typically though, when someone refers to “full coverage” they are talking about getting paid for damages to their own automobile, for instance, if your vehicle catches on fire, or is vandalized. These coverages are referred to as “physical damage” coverage and are typically broken into two different categories – Collision and Other than Collision (other than collision used to be referred to as comprehensive).
Collision coverage would pay for damages caused to your vehicle if it were to collide with another object – example, if your vehicle is hit by another car, or you run into a tree or something along those lines.
Other than collision would pay for damages such as fire, theft, vandalism, flood, etc.
Since insurance is regulated by each state, these coverage definitions can be different by state and in some cases, the definitions can even vary by insurance companies within the same state as some states allow insurance companies, within reason, to dictate what is covered.
So with all of that said, based on what you have asked, I would recommend purchasing physical damage coverage, as it is designed to pay for the damages to your vehicle and I would also recommend that you discuss with your agent what coverage would extend to upgrades of the vehicle as you very well may need to purchase custom equipment coverage for the upgrades you mention.
Posted: Wed May 26, 2010 04:15 pm Post Subject:
Great question. When your car is paid off, you no longer have a bank requiring you to carry coverage to pay if your vehicle is damaged in an auto accident. At this point, you would only be required to carry what the state law dictates. However, based on your statement, you want to make sure your automobile is replaced in the event of a claim. In that case, you would want to purchase more than what is required.
Do note though, most auto insurance policies cover only the factory equipment that was included on the vehicle originally, unless you specifically ask for custom equipment coverage. In addition, many policies will cap the amount that will be paid out for any sound reproducing equipment.
Posted: Wed May 26, 2010 04:16 pm Post Subject:
“Full coverage” is a very misleading term but unfortunately is often used when talking about auto insurance. No auto policy will cover everything. There will be limits as to what is paid.
Typically though, when someone refers to “full coverage” they are talking about getting paid for damages to their own automobile, for instance, if your vehicle catches on fire, or is vandalized. These coverages are referred to as “physical damage” coverage and are typically broken into two different categories – Collision and Other than Collision (other than collision used to be referred to as comprehensive).
Collision coverage would pay for damages caused to your vehicle if it were to collide with another object – example, if your vehicle is hit by another car, or you run into a tree or something along those lines.
Other than collision would pay for damages such as fire, theft, vandalism, flood, etc.
Since insurance is regulated by each state, these coverage definitions can be different by state and in some cases, the definitions can even vary by insurance companies within the same state as some states allow insurance companies, within reason, to dictate what is covered.
So with all of that said, based on what you have asked, I would recommend purchasing physical damage coverage, as it is designed to pay for the damages to your vehicle and I would also recommend that you discuss with your agent what coverage would extend to upgrades of the vehicle as you very well may need to purchase custom equipment coverage for the upgrades you mention.
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